U.S. Secretary of State Condoleezza Rice called on Israel on Tuesday to avoid undermining peace efforts with the Palestinians after a report that it had nearly doubled construction in Jewish settlements.

Israel's Peace Now group, citing data from the Central Bureau of Statistics, stated construction had started on more than 443 structures in settlements in the occupied West Bank since January compared with 240 starts in the same period in 2007.

Rice, on a new Middle East visit, reiterated at a news conference with Israeli Foreign Minister Tzipi Livni her long-standing criticism of settlement building. "I think it's no secret, and I have said it to my Israeli counterparts, that I don't think that settlement activity is helpful," Rice said, according to Reuters.

"In fact, what we need now are steps that enhance confidence between the parties and anything that undermines confidence between the parties ought to be avoided," she said.

Livni said Israeli settlement activity had been reduced "in the most dramatic way", especially in areas east of the barrier Israel is erecting in the West Bank.

"The peace process is not, and should not be, affected by any kind of settlement activities," Livni added, cautioning against allowing what she termed "noise" to derail peace negotiations.

Rice, on her seventh visit to the Middle East this year, has said she still hopes a peace agreement can be reached by January, when President George W. Bush leaves office. "I believe that the parties have succeeded in moving their understandings of what needs to be achieved, and indeed their positions, somewhat closer together," Rice told the news conference.